LECTURE 6 - CONTRACT LAW, PROBLEMS IN OFFER AND ACCEPTANCE - 28/10/2019 The Postal Rule - It's much easier to decipher the point where there is an agreement when you are in close proximity physically or digitally. - There is an obvious interval between when an offer is made and when it is accepted. - What happens when an offeror sends the offer and then he changes his mind? The courts created the postal rule to aid this. - When is a posted acceptance effective? o Adams v Lindsell (1818) - 'where the post is the reasonable means of sending a contract acceptance, that acceptance becomes valid and binding upon the posting of the letter'. " The defendants wrote to the plaintiffs on 2 September, offering to sell them some wool and requested that the plaintiffs reply 'in course of post'. The letter which contained the offer was wrongly addressed and therefore the plaintiffs did not receive it until 5 September. As a result of this delay, the letter of acceptance was not received until 9 September by the defendants, and this was two days later than the defendants would have expected to receive it. Because of this, on 8 September the defendants had sold the wool to a third person. " The question for the court in Adams v Lindsell was therefore whether a contract of sale had been entered into before 8 September when the wool was sold to the third party. " The court held that the offer had been accepted as soon as the letter had been posted. Thus, in Adams v Lindsell there was indeed a contract in existence before the sale of the wool to the third party, even though the letter had not actually been received by the defendant. The defendant was therefore liable in breach of contract. o Arguments based on business efficiency and convenience. - Applies even if letter never delivered - Household Fire Insurance v Grant (1879) Limitations on the Postal Rule - The rule only applies to acceptance of offers. It does not apply to making offers, revocation of offers, or any other elements in contractual negotiations. - Must be reasonable to use the post - Henthorn v Fraser (1892) - If an offer was made by phone, it would not be reasonable to post the acceptance. - Lord Herschell - 'it must have been within the reasonable contemplation of the parties that, according to the ordinary usages of mankind, the post might be used as a means of communicating the acceptance of an offer' - Offeror may exclude the rule - Quenerduaine v Cole (1883) - speed of communication of offer is relevanttt speed of communication has to be equal by both parties. Holwell Securities v Hughes (1974)- stating 'notice in writing' means actual communication was required, offeror needs to see communication before bound.
Acceptance in Bilateral Contracts - - Offer can be accepted at any point until it is revoked/withdrawn Revocation/Withdrawal can be: - Communication i. Including